TikTok Deal Stalls Amid US-China Trade Tensions
A proposed deal to spin off TikTok’s U.S. assets has hit a major roadblock as China signaled its disapproval following former President Donald Trump’s recent tariff announcement. The deal, which aimed to establish a new U.S.-based company majority-owned by American investors, was largely finalized by April 2 but now faces uncertainty.
On April 4, Trump extended the deadline for ByteDance, TikTok’s parent company, to divest its U.S. operations by 75 days. Originally set to take effect in January under a 2024 law, the ban would have prohibited TikTok’s operations in the U.S. if the divestiture was not completed. ByteDance would have retained less than a 20% stake in the new entity.
China’s opposition comes in the wake of Trump’s announcement of a 54% tariff on Chinese goods, escalating trade tensions between the two nations. ByteDance confirmed ongoing negotiations with the U.S. government but acknowledged significant differences remain. The Chinese Embassy in Washington reiterated its stance, emphasizing the protection of market economy principles and enterprise rights.
Trump expressed optimism about reaching an agreement, stating his willingness to reduce tariffs on China to facilitate the deal. However, the lack of Chinese government approval remains a critical hurdle, casting doubt on the future of TikTok’s U.S. operations.
The situation underscores the complex interplay between trade policies and corporate negotiations, with implications for the 170 million Americans who use TikTok.
